Some retailers not applying lower sales tax

Westfield mall shoppers went up and down the escalators to find their preferred stores.
Hundreds of people went out to find deals in black Friday, the beginning of the Christmas shopping season, in San Francisco, Calif., on Friday, Nov. 26, 2010. less

Westfield mall shoppers went up and down the escalators to find their preferred stores.
Hundreds of people went out to find deals in black Friday, the beginning of the Christmas shopping season, in San ... more

Photo: Michelle Gachet, The Chronicle

Photo: Michelle Gachet, The Chronicle

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Westfield mall shoppers went up and down the escalators to find their preferred stores.
Hundreds of people went out to find deals in black Friday, the beginning of the Christmas shopping season, in San Francisco, Calif., on Friday, Nov. 26, 2010. less

Westfield mall shoppers went up and down the escalators to find their preferred stores.
Hundreds of people went out to find deals in black Friday, the beginning of the Christmas shopping season, in San ... more

Photo: Michelle Gachet, The Chronicle

Some retailers not applying lower sales tax

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Today I've got answers to questions from readers who want to know why some California retailers haven't lowered their sales tax rate, how to stop unemployment benefits and whether the government's decision to essentially end sales of paper savings bonds will cut the annual purchase limit in half.

Q:Francesca Wander writes, "Many San Francisco businesses, and perhaps beyond, have not readjusted their sales tax calculations to reflect the 1 percent reduction that went into effect July 1. While I think reducing them at a time that our state is starved for cash was a bad idea, I expect our businesses to comply now that they have been. What can be done about this, in addition to pointing out to individual business owners the error of their ways?"

A: I stopped by a couple retailers Wander mentioned on Thursday - Thom's Natural Foods on Geary and Soup Freaks on Mission - and found that they were still charging 9.5 percent (the old rate for San Francisco) instead of 8.5 percent, the correct rate as of July 1.

Michelle Ryan, manager of Thom's, said she knew about the change but has not been able to reach the guy who changes her cash register, despite calling him every day. "It's not something I can fix myself," she says.

Shirley Rafie, founder of Soup Freaks, said she had not heard about the change and had not received anything in the mail about it. She immediately corrected the problem by updating her cash register's software.

It's not always easy for consumers to spot the mistake because some retailers don't show the sales tax rate, only the amount.

After hearing that some retailers were charging the incorrect tax, the California Board of Equalization issued a second "special notice," says Anita Gore, a spokeswoman for the board. The notice is posted at sfg.ly/n637zH.

"If a customer is overcharged, they must take up the issue with the retailer and ask for a refund. A retailer may not keep any tax overcharged. They must return it to consumers or send it to the BOE. If someone is aware of incorrect tax being charged, and are not satisfied with the retailer's response, they should contact their local BOE office," Gore says.

She says the board e-mailed about 680,000 retailers twice about the change, but it doesn't have e-mail addresses for every retailer that is registered with the board.

The state sales tax rate dropped to 7.25 percent from 8.25 percent effective July 1 when a temporary surcharge imposed in 2009 expired. The rate is higher in areas where voters approved extra taxes. To find the right rate in your area, go to sfg.ly/pSI7hn.

Q:Thomas Coates of Castro Valley asks: "Now that I've found a new job, what do I do to stop unemployment? I looked on the California Employment Development Department website and couldn't find anything. If I just don't send it in, does that work? I want to help the unemployment rate go down to 9.1 next month."

A: People receiving unemployment benefits are not required to cancel a claim when they go back to work, EDD spokeswoman Patti Roberts says. They can just not submit their continued claim form and payments will cease. This is explained in the Unemployment Handbook mailed to claimants.

Q:In response to my Thursday column, Diane Harris of Belmont asks if the government's decision to essentially end the sale of paper savings bonds will cut the annual purchase limit in half. "I have no idea why Treasury wants to limit the amount of bonds an individual can purchase," she writes.

A: The answer is yes, the government's decision will effectively reduce the purchase limit, although that was not the intent.

Today, Americans can buy up to $20,000 worth of bonds each year for each Social Security number. They can buy $5,000 worth of paper Series EE bonds and $5,000 in paper Series I inflation-linked bonds.

They can also buy $5,000 EE bonds and $5,000 I bonds online through TreasuryDirect.gov. These bonds are held electronically and not issued in paper.

To save money on printing and mailing, the Bureau of the Public Debt said last week that after Dec. 31, it will no longer sell paper bonds through banks, which generally didn't like handling them because their fee is less than a buck per bond. It also will end a test, started quietly last fall, that lets people order paper bonds via TreasuryDirect. (To find the forms, go to sfg.ly/nDXSD1 and look under Purchase Forms.)

After this year, people can still buy electronic bonds via TreasuryDirect, but the only way they can buy paper bonds is by investing a federal tax refund in a Series I bond. Paper EE bonds will no longer be available.

Unless you want to invest the tax refund, the purchase limit will drop by half to $10,000 per year ($5,000 EE bonds and $5,000 I bonds, all held electronically).

Mckayla Braden, a spokeswoman for the Bureau of the Public Debt, said the government just wanted to save money and did not consider the impact on purchase limits before last week. "Maybe we should have anticipated this. That is the No. 1 question we have been getting."

She said the Treasury Department would have to raise the purchase limit and might consider doing so but "it's not on the table for discussion yet," she said. "I don't expect anything would happen in the near future" and possibly not before January.

The Treasury has been trying to steer investors out of savings bonds and into marketable securities such as bills, bonds and notes. In 2008, it slashed the annual savings bond purchase limit to the current $20,000 but began lowering the minimum investment required for marketable Treasuries to $100 from $1,000.

Treasury doesn't want too many big savers in savings bonds because they can defer federal tax on the interest until a bond is cashed in. Savers cannot defer the tax on marketable-security interest unless they are held in a retirement account.

After Dec. 31, banks can still redeem paper savings bonds. Bonds that have not matured, but were lost, stolen or destroyed, can be reissued in paper or electronic form.